WO2002015090A1

WO2002015090A1 - Process and system for providing premium increase protection for insurance policies

Info

Publication number: WO2002015090A1
Application number: PCT/US2001/025301
Authority: WO
Inventors: Shekar Jannah; Dave Mcmahon; Walter Neeves; Shawn Parks; Randolph F. Totten
Original assignee: Ge Financial Assurance Holdings, Inc.
Priority date: 2000-08-14
Filing date: 2001-08-14
Publication date: 2002-02-21
Also published as: AU2001283331A1

Abstract

A process and system for providing premium increase protection for insurance policies is provided, wherein a third party, separate from the insurer that issues the insurance policy, provides the premium increase protection. A policyholder (15) purchases an insurance policy with premium increase protection, wherein the premiums paid by the policyholder (15) generally do not increase above a predetermined amount. A payor pays the insurer the amount of any premium increase. The surety is reimbursed for the amount of any premium increase and, in return, the surety agrees not to try to collect the increase amount from policyholder (15).

Description

PROCESS AND SYSTEM FOR PROVIDING PREMIUM INCREASE PROTECTION FOR

INSURANCE POLICIES

Field of the Invention

The present invention relates generally to a process and system for providing protection for insurance policies against increases in premiums payable. More particularly, the invention relates to having a third party, separate from the insurer, provide protection for term life insurance policies against increases in premiums payable.

Background of the Invention

"Insurance" is a contract or policy whereby, for a stipulated consideration or "premium," one party (an "insurer") agrees to compensate the other party ("a policyholder") for a loss on a specified subject matter caused by specified perils or risks. Insurance policies are a common purchase for many people. Types of insurance policies may include life insurance, automobile insurance, health insurance, or other types of insurance. Pursuant to the terms of an insurance policy, the insurer agrees to pay certain amounts when one or more claims are made by the policyholder against the insurance policy (e.g., pay a certain amount upon the death of a life insurance policyholder, pay for damage to an automobile under an automotive insurance policy, etc.). In exchange, the policyholder pays the insurer premiums. Insurance policies can be "paid-up" where the policyholder has paid all required premiums and there are no further premiums due. Or, alternatively, premiums may be paid periodically in installments where the insurance policy remains in effect as long as the premiums are paid. For some types of insurance, the insurance policy is in effect for a set term, such as twenty years. For example, a term life insurance policy is a form of life insurance providing insurance protection to the insured party for only a specified period of time (i.e., the "term"). The term policy may be renewable, however, from term to term. Premiums may be paid on the term life insurance policy on a periodic basis (e.g., annually, every six months, monthly, etc.).

In many policies, once a specified period of time has elapsed, the insurer may readjust and change the amount of premiums payable by the policyholder. Sometimes the amount of premiums payable by the policyholder change as a result of actions that the policyholder can control. By way of example, premiums for automobile insurance often increase if the automobile being insured is involved in an accident that requires the insurer to pay a claim. Other changes in premiums payable may be due to factors which the policyholder cannot control. For example, premiums for term life insurance increase as the policyholder ages. Thus, the policyholder of a twenty year term life insurance policy may have to pay premiums that increase over the twenty year term of the policy. Increases in the premiums payable may make it difficult for a policyholder to budget for future insurance coverage.

One attempt at addressing changes in premiums payable is to provide premium protection or "fully guaranteed premiums" in an insurance policy. An insurer may offer policies with fully guaranteed premiums whereby the insurer promises that the amount of premiums payable by the policyholder will be set at a specified level for the term of the policy. Such guarantees, however, require an insurer to assume the risk of loss if the policyholder files a claim against the policy which exceeds the amount of premiums paid. Furthermore, various federal, state and/or local insurance regulations may require that the insurer have a specified level of reserves on hand for covering insurable losses of the insurer's policyholders who are parties to policies with fully guaranteed premiums. Some regulations require that the insurer maintain different levels of reserves depending upon the guarantee time period, or may require different disclosures. These additional cash reserve requirements may be burdensome to the insurer, thereby creating a disincentive to offer policies with fully guaranteed premiums. These and other drawbacks exist in current systems and processes for providing insurance with guaranteed premium levels.

Summary of the Invention

An object of the present invention is to overcome these and other drawbacks in existing systems and methods.

Another object of the invention is to provide a system and methodology for offering protection against increases in premium levels for insurance policies.

An additional object of the present invention is to provide a system and method for providing insurance policies with fully guaranteed premium levels without the insurer bearing the entire risk of loss if the rates for such insurance policies are otherwise required to be increased, such as pursuant to applicable insurance regulations or other actions. Additional objects and advantages of the invention will be set forth in part in the description, or may be learned by practice of the invention. The objects and advantages of the invention may be realized and attained by means of instrumentalities and combinations particularly pointed out in the appended claims. To achieve these objects and in accordance with the purpose of the invention, as embodied and broadly described herein, an insurance system for issuing an insurance policy to a policyholder comprises an insurance policy component, wherein the insurance policy component requires the policyholder to pay an amount of periodic premiums to an insurer to maintain the insurance policy in force, the insurance policy component including a guaranteed premium level feature for ensuring that the amount of periodic premiums payable by the policyholder to the insurer does not increase above a predetermined amount; and at least one premium increase protection component, the premium increase protection component including a payor subject to the guaranteed premium level feature and responsible for paying the insurer for a predetermined portion of an increase in the periodic premiums payable above the predetermined amount.

In another aspect, a process for issuing an insurance policy to a policyholder comprises the steps of issuing an insurance policy to the policyholder, wherein the policyholder pays an amount of periodic premiums to an insurer to maintain the insurance policy in force, and the policyholder is provided premium increase protection for ensuring that the amount of periodic premiums payable by the policyholder to the insurer do not increase above a predetermined amount; and collecting a predetermined portion of an increase in the amount of periodic premiums payable by the policyholder to the insurer from at least one premium increase protection component.

In a further aspect, an insurance system for issuing an insurance policy to a policyholder comprises an insurance policy component, wherein the insurance policy component requires the policyholder to pay an amount of periodic premiums to an insurer to maintain the insurance policy in force, the insurance policy component including a premiums level feature for assuring that the amount of periodic premiums payable by the policyholder to the insurer does not increase above a predetermined amount; and at least one premium increase protection component, said premium increase protection component including a payor subject to the premium level feature and responsible for paying the insurer for a predetermined portion of an increase in the periodic premiums payable above the predetermined amount, and wherein the policyholder is responsible for paying the insurer for the predetermined portion of an increase in the periodic premium payable above the predetermined amount if the at least one premium increase protection component is unable to meet its responsibilities.

In another aspect, a process for issuing an insurance policy to a policyholder comprises the steps of issuing an insurance policy to the policyholder, wherein the policyholder pays an amount of periodic premiums to an insurer to maintain the insurance policy in force, and the policyholder is provided premium increase protection for ensuring that the amount of periodic premiums payable by the policyholder to the insurer do not increase above a predetermined amount; and collecting a predetermined portion of an increase in the amount of periodic premiums payable by the policyholder from at least one premium increase protection component, wherein the policyholder is responsible for paying the insurer for the predetermined portion of an increase in the periodic premium payable above the predetermined amount if the at least one premium increase protection component is unable to meet its responsibilities. The accompanying drawings, which are incorporated in and constitute a part of this specification, illustrate an embodiment of the invention and, together with the description, serve to explain the principles of the invention.

Brief Description of the Drawings Figure 1 is schematic representation of a system for providing premium level protection for insurance policies according to an embodiment of the present invention; and

Figure 2 is a flowchart illustrating a process for providing premium level protection for insurance policies according to an embodiment of the present invention.

Detailed Description of the Preferred Embodiments

Reference will now be made in detail to the present preferred embodiment of the invention, an example of which is illustrated in the accompanying drawings, in which like reference characters refer to corresponding elements. Figure 1 is a schematic representation of a system 10 for implementing an embodiment of the invention. The system 10 comprises a plurality of policyholders 15a- 15n, an insurance policy component 20, two premium increase protection components 25A and 25B, and two reimbursement components 30A and 30B. While the present embodiment illustrated in Figure 1 is described in reference to a certain number of each type of component, it should be understood that a different number of components than are illustrated in Figure 1 may be used in the system 10 without departing from the scope and spirit of the present invention. The system 10 will now be described in more detail. One of the plurality of policyholders 15a-15n, policyholder 15a, may contract with an insurer for insurance coverage against various types of risks. The insurer may issue various types of insurance policies to the policyholder 15a (the insurance policy component 20 of a contract between the insurer and the policyholder 15a). The insurance policies issued may be life insurance, automobile insurance, home insurance, health insurance, dental insurance, or other types of insurance. Additionally, various subsets of types of insurance policies, such as term life insurance, whole life insurance, comprehensive automobile insurance, collision automobile insurance or other subsets of such types of insurance may also be issued to policyholder 15a. In exchange for such insurance policy, the policyholder 15a pays an amount of money in the form of periodic premiums to the insurer in the insurance policy component 20 to maintain the insurance policy in effect for a term of the policy. Such premiums may be paid on predetermined dates and in predetermined amounts. The steps involved in processes for issuing insurance policies and paying periodic premiums are known to those of ordinary skill in the art. In addition to issuing insurance policies, the insurer in the insurance policy component 20 may offer premium increase protection features to the policyholder 15a. Pursuant to such premium increase protection features, the insurer in the insurance policy component 20 agrees that the amount of periodic premiums payable by the policyholder 15a will remain fixed at a predetermined level for the term of the policyholder I5a's insurance policy. According to an embodiment of the invention, a premium increase protection feature may be offered as an additional service, where the policyholder 15a pays an additional amount for such feature, either by paying a certain amount with each payment of the periodic premiums or pursuant to a one time, up front fee. According to another embodiment of the invention, the policyholder 15a pays the insurance policy premium and receives the premium increase protection feature without a specific amount of the premium designated for the feature. Other manners of offering and paying for the premium level feature may also be used. By way of example, the insurer in the insurance policy component 20 offers term life insurance to policyholder 15a, and quotes various insurance premium rates for various terms and amounts of coverage. The policyholder 15a selects a thirty year term life insurance policy, with a premium increase protection feature, for life insurance coverage in an amount of one million dollars ($1,000,000). In exchange for such a life insurance policy and coverage, the policyholder 15a then pays the insurer annual premiums of $2,000.00 to maintain the policy in force for the term. In addition, the policyholder 15a pays an annual fee of $100.00 for the premium increase protection feature. With the premium increase protection feature, the policyholder 15a is assured of paying no more than $2,100.00 a year for the entire thirty year term of the life insurance policy.

According to another example, a policyholder 15a may be charged for the insurance policy premium, where no portion of the premium is specifically designated for the premium increase protection feature. By way of this example, a policyholder pays $2,000.00 a year, with no designation of what portion of the premium is for insurance and what portion of the premium is for the premium increase protection feature. The insurer may then use some amount of a particular policyholder' s 15a premium to pay for the premium increase protection feature for that particular policy, or may pay a predetermined amount for premium increase protection for a number of insurance policyholders. Other manners of paying for the premium increase protection feature may also be used.

The insurance policy component 20 is associated with premium increase protection components 25A and 25B that assume responsibility for paying the insurer of the insurance policy component 20 at least a portion of any premium increase which would have been applicable to the policyholder 15a' s insurance policy because of a premium rate change, but which the insurer does not charge to the policyholder 15a, since the policyholder 15a has a premium increase protection feature. Figure 1 illustrates the system 10 as having two premium increase protection components 25 A and 25B. However, system 10 may use only one premium increase protection component 25, or, alternatively, system 10 may use three or more premium level protection components 25. The insurer in the insurance policy component 20 may pay one of the premium increase protection components 25A to provide the necessary premium increase protection to the policyholder 15a. According to an embodiment of the invention, the insurer pays a surety premium to one of the premium increase protection components 25A, thereby creating a surety bond relationship. The surety bond relationship creates a contract between the insurer of insurance policy component 20 and the premium increase protection component 25 A. Other relationships may also be entered into by the insurer of insurance policy component 20 and the premium increase protection component 25A. Further, other contractual arrangements may be used to create relationships between policyholder 15a and the premium increase protection component 25 A, or between the policyholder 15 a, the insurer of insurance policy component 20 and the premium increase protection component 25A. The premium increase protection component 25A, in exchange for the payment by the insurer, such as payment of the surety premium, agrees to pay for any applicable increase in the periodic premiums which would have been payable by the policyholder 15a under the policyholder 15a's insurance policy contract. In the present invention, the premium increase protection component 25A pays the insurer in the insurance policy component 20 so that the policyholder 15a does not pay the increase in premiums.

According to an embodiment of the invention, premium increase protection component 25A pays for an increase in premiums, but does not guarantee payment for the policyholder 15a. Thus, if the premium increase protection component 25 A is unable to meet its obligations, such as due to bankruptcy, insolvency, court order or other reason, the policyholder 15a is responsible for paying the insurer of insurance policy component 20 the increase in premiums. According to another embodiment of the invention, premium increase protection component 25A provides a true guarantee, where a policyholder 15a is never responsible for increases in premiums. If the premium increase protection component 25A is unable to meet its responsibilities, insurance policy component 20 has no recourse to the policyholder 15 a. Other configurations for responsibility may also be used for premium increases.

According to an embodiment of the invention, premium increase component 25 A may pay only a portion of a total amount of the premium increase or, alternatively, may pay the total amount of the premium increase. For example, premium increase protection component 25A agrees to pay seventy-five percent (75%) of all premium increases that would otherwise be applicable under the policyholder 15a's insurance policy. If the amount of premium increases by $100.00, premium increase protection component 25 A pays $75.00 to the insurer in the insurance policy component 20. The remaining $25.00 may be paid by another premium increase protection component (e.g., premium increase protection component 25B), may be absorbed by the insurer in the insurance policy component 20 (e.g. never disclosed or charged to the policyholder), or absorbed by the policyholder (e.g. when the premium increase component 25 A is unable to meet its responsibilities, the policy holder 15a pays the increase amount), depending upon what other arrangements the insurer in the insurance policy component 20 has made with the policyholder 15a and the premium increase protection component 25A.

By way of another example, in a thirty year term life insurance policy for policyholder 15a, the insurer in the insurance policy component 20 pays any premium increases for the first ten years of the policy, while premium increase protection component 25A agrees to pay for any premium increases for the remaining twenty years under the policyholder 15a's insurance policy. Other combinations and allocations of responsibility for various portions of premium increases may also be used.

Reimbursement components 30A and 30B reimburse premium increase protection components 25 A and 25B for payments due to increases in premiums that premium increase protection components 25A and 25B have to pay to the insurer in the insurance policy component 20. In return, premium increase protection components 25A and 25B agree to waive the right to collect such payments from policyholder 15a.

As described above, premium increase protection components 25A and 25B may each agree to pay the insurer in the insurance policy component 20, such as by holding a surety bond from the insurer. In the example of a surety bond relationship, after paying the insurer for any amount of premium increase applicable to the policyholder 15a's insurance policy, the holders of the surety bonds, i.e., premium increase protection components 25 A and 25B, typically have the legal right to collect the amount of such payments from the party to the contract who did not perform as required, i.e., the policyholder 15a. According to the present invention, such as where a surety relationship is present, the premium increase protection component 25A, upon paying the insurer in the insurance policy component 20 the amount of the premium increase otherwise payable by the policyholder 15a, has the legal right to collect the amount paid from policyholder 15a. To deter the premium increase protection component 25 A from actually collecting from the policyholder 15a the amount paid by the premium increase protection component 25 A, and thereby having the policyholder 15 actually pay the increase in the premium, reimbursement component 30A reimburses the premium increase protection component 25A for the amount paid to the insurer in the insurance policy component 20. In exchange for this payment/reimbursement, premium increase protection component 25A agrees that it will not attempt to collect from the payment from the policyholder 15 a. In the preferred embodiment of the invention, the insurer in the insurance policy component 20, the premium increase protection components 25 A and 25B, and the reimbursement components 30A and 30B are separate entities. However, it should be understood that each component may be offered by the same entity, different entities with common ownership, or any number of combinations of other entity structures and relationships.

Figure 2 is a flowchart illustrating a process for providing a premium increase protection feature for insurance policies according to an embodiment of the present invention. At step 102, a policyholder 15a purchases an insurance policy from an insurer in an insurance policy component 20. The insurance policy has a premium increase protection feature, whereby the policyholder 15a is assured that the amount of premiums payable by the policyholder 15a will not rise above a predetermined amount. The insurance policy may be any type of insurance that is purchased by policyholders (e.g., term life insurance, whole life insurance, comprehensive automobile insurance, health insurance, dental insurance, etc.). Policyholder 15a pays premiums to the insurer in the insurance policy component 20 to maintain the insurance policy in effect. Under the terms of the insurance policy, the premiums are to be paid by the policyholder 15a to the insurer in a predetermined amount and at periodic predetermined times. For example, assume that the policyholder 15a contracted with the insurer to purchase a life insurance policy with a 30-year term and having a premium increase protection feature for the full 30-year term. The policyholder 15a is required to pay annual premiums in the amount of $2,250.00. the policy holder 15a may be informed that a predetermined amount of the premium (e.g. $250.00) is for the premium increase protection feature. Alternatively, the portion of the premium designated for the premium increase protection feature is not indicated. Assume further that the insurer has contracted with premium increase protection component 25B for premium increase protection component 25B to pay for any increase in the premiums payable under the policyholder 15a's policy after the first ten years of the term in order that the insurer may decrease the amount of reserves it is required to have on hand for its policyholders having policies with fully guaranteed premiums. As stated above with regard to the system of the present invention, premium increase protection component 25B may guarantee payment, or just be responsible for the payment.

At step 104 of the process of Figure 2, upon issuing the insurance policy, the insurer in the insurance policy component 20 makes a payment to a premium increase protection component 25B, such as for a surety bond. In exchange for such payment from the insurer in the insurance policy component 20, the premium increase protection component 25B agrees to pay the insurer in the insurance policy component 20 for increases under the policyholder 15a's policy in the amount of premiums payable above the predetermined amount after the first ten years of the term of the policy have elapsed.

At step 106, the insurer in the insurance policy component 20 determines if the costs associated with maintaining the policyholder 15a's insurance policy in effect have increased sufficiently to require that the amount of insurance premiums payable by the policyholder 15a under the policy be increased. If not, no premium increase is implemented. After a predetermined period of time elapses following the prior determination under step 106, the process returns to step 106 to again determine if the costs associated with maintaining the policyholder 15a's policy in effect have increased sufficiently to require that the amount of insurance premiums payable by the policyholder 15a under the policy be increased. This determination under step 106 may be made at any predetermined time interval (e.g., yearly, quarterly, monthly, etc.) as is understood in the insurance industry. It is also understood that this determination may not be made at certain times during the life of an insurance policy. For example, if the insurer of insurance policy component 20 has agreed not to increase premiums for the first ten years of a thirty year term life policy, the insurer may decide not to make this determination may not be made by the insurance policy component 20 for the first ten years of the policy.

Under step 106, if the insurer's costs have increased and the amount of premiums payable under the policy should be increased above $2000.00 per year, the insurer in the insurance policy component 20 determines if the premium increase protection component 25B is obligated to pay the applicable increase in the premiums at step 108 (i.e., a determination is made that the first ten years of the term of the policy has or has not elapsed). If the premium increase protection component 25B is not obligated to pay such premium increase because the first ten years of the term of the policy have not elapsed, - li the insurer must bear the costs associated with the premium increase since the insurer has promised the policyholder 15a that the policyholder 15a's premiums would not increase. According to this example, if the insurer must pay for premium increases in the first ten years of the policy, then the insurer may decide not to determine if premiums have increased for that ten year period of time. The process then returns after a predetermined time period to step 106 to again determine if the costs associated with maintaining the insurance policy in effect have increased sufficiently to require that the insurance premiums be increased.

If a determination is made at step 106 that the premium increase protection component 25B is obligated to pay the insurer for increases in the amount of premiums payable under the policy (i.e., the first ten years of the term of the policy have elapsed), premium increase protection component 25B pays the insurer in the insurance policy component 20 the agreed-upon amount at step 110.

At step 112, reimbursement component 30B pays (e.g., reimburses) premium increase protection component 25B for the amounts paid to the insurer in the insurance policy component 20 at step 110. In exchange for the reimbursement, premium increase protection component 25B agrees not to attempt to collect the increase in insurance premiums from policyholder 15a. It should be appreciated, however, that other manners and configurations of the process for providing premium increase protection for insurance policies may also be used.

According to another embodiment of the invention, a computer-usable medium having a computer-readable program code embodied therein for conducting an electronic computation may be provided. For example, the computer-usable medium may comprise a CD ROM, a floppy disk, a hard disk, or any other computer-usable medium. One or more of the components of the system may comprise computer-readable program code that is provided on the computer-usable medium such that when the computer-usable medium is installed on a computer system, those components cause the computer system to perform the functions described.

According to one embodiment of the invention, one or more of the insurance policy component 20, premium increase protection components 25A and 25B and reimbursement components 30A and 30B may be comprised of computer-readable code such that, when installed on a computer, the computer-readable code perform the functions described above with respect to each component. Additionally, various entities and combinations of entities may employ a computer to perform the above described functions. The computer used for such embodiment may be a standard computer comprising an input device, an output device, a processor device, and a data storage device. According to other embodiments of the invention, various components may be comprised of computers from different departments within the same corporation or entity. Other computer configurations may also be used. According to another embodiment of the invention, various components may be separate entities, such as separate corporations or limited liability companies. Other embodiments, in compliance with applicable laws and regulations, may also be used. ' According to one specific embodiment of the present invention, the system may operate on a network and may be connected to other systems sharing a common database. Other hardware arrangements may also be provided.

As can be appreciated from the above description, the invention enables an insurer to continue to offer a policyholder premium increase protection under an insurance policy. However, by utilizing a third party surety to bear some of the risk associated with premium increases instead of having the policyholder and/or the insurer bear all risks, the insurer is able to offer longer term fully guaranteed premiums thereby benefiting policyholders. On the other hand, the insurer also benefits by not having to bear all risks of premium increases nor having to carry large reserves. Other embodiments, uses and advantages of the present invention will be apparent to those skilled in the art from consideration of the specification and practice of the invention disclosed herein. The specification and examples should be considered exemplary only. The intended scope of the invention is only limited by the claims appended hereto.

Claims

CLAIMSWhat is Claimed is:

1. An insurance system for issuing an insurance policy to a policyholder comprising: an insurance policy component, wherein the insurance policy component requires the policyholder to pay an amount of periodic premiums to an insurer to maintain the insurance policy in force, the insurance policy component including a guaranteed premium level feature for ensuring that the amount of periodic premiums payable by the policyholder to the insurer does not increase above a predetermined amount; and at least one premium increase protection component, the premium increase protection component including a payor subject to the guaranteed premium label feature and responsible for paying the insurer for a predetermined portion of an increase in the periodic premiums payable above the predetermined amount.

2. The system according to claim 1, wherein the insurance policy is a term life insurance policy.

3. The system according to claim 1, wherein the at least one premium increase protection component is an entity separate and distinct from the insurer in the insurance policy component.

4. The system according to claim 1, further comprising at least one reimbursement component for reimbursing the at least one premium increase protection component for the amounts paid to the insurer.

5. The system according to claim 4, wherein the payor is a surety and the surety enters into an agreement not to collect a payment from the policyholder when the surety is required to pay the insurer the predetermined portion of the increase and, in exchange for the agreement of the surety, the at least one reimbursement component makes a reimbursement payment to the surety.

6. The system according to claim 1, wherein the insurer pays a predetermined amount to the at least one premium increase protection component to create a surety relationship between the insurer and the at least one premium increase protection component.

7. The system according to claim 1, wherein the payor is a surety.

8. A process for issuing an insurance policy to a policyholder comprising the steps of: issuing an insurance policy to the policyholder, wherein the policyholder pays an amount of periodic premiums to an insurer to maintain the insurance policy in force, and the policyholder is provided premium increase protection for ensuring that the amount of periodic premiums payable by the policyholder to the insurer do not increase above a predetermined amount; and collecting a predetermined portion of an increase in the amount of periodic premiums payable by the policyholder from at least one premium increase protection component.

9. The process according to claim 8, wherein the insurance policy is a term life insurance policy.

10. The process according to claim 8, wherein the at least one premium increase protection component is an entity separate and distinct from the insurer in the insurance policy component.

11. The process according to claim 8, wherein the predetermined portion of the increase in the amount of periodic premiums is a portion of the difference between the predetermined amount of periodic premiums and an actual amount of premiums payable.

12. The process according to claim 8, wherein the at least one premium increase protection component is reimbursed for the predetermined portion of the increase collected from the at least one premium increase protection component by at least one reimbursement component.

13. The process according to claim 8, wherein the at least one premium level protection component enters into an agreement not to collect a payment from the policyholder when the predetermined portion of the increase is collected from at least one premium level protection component and, in exchange for the agreement of the at least one premium increase protection component, an at least one reimbursement component makes a reimbursement payment to the at least one premium increase protection component.

14. The process according to claim 8, wherein the insurer pays a predetermined amount to the at least one premium increase protection component to create a surety relationship between the insurer and the at least one premium increase protection component.

15. An insurance system for issuing an insurance policy to a policyholder comprising: an insurance policy component, wherein the insurance policy component requires the policyholder to pay an amount of periodic premiums to an insurer to maintain the insurance policy in force, the insurance policy component including a premiums level feature for assuring that the amount of periodic premiums payable by the policyholder to the insurer does not increase above a predetermined amount; and at least one premium increase protection component, said premium increase protection component including a payor subject to the premium level feature and responsible for paying the insurer for a predetermined portion of an increase n the periodic premiums payable above the predetermined amount, and wherein the policyholder is responsible for paying the insurer for the predetermined portion of an increase in the periodic premium payable above the predetermined amount if the at least one premium increase protection component is unable to meet its responsibilities.

16. The system according to claim 15, wherein the insurance policy is a term life insurance policy.

17. The system according to claim 15, wherein the at least one premium increase protection component is an entity separate and distinct from the insurer in the insurance policy component.

18. The system according to claim 15, further comprising at least one reimbursement component for reimbursing the at least one premium increase protection component for the amounts paid to the insurer.

19. The system according to claim 18, wherein the payor is a surety and the surety enters into an agreement not to collect a payment from the -policyholder when the surety is required to pay the insurer the predetermined portion of the increase and, in exchange for the agreement of the surety, the at least one reimbursement component makes a reimbursement payment to the surety.

20. The system according to claim 15, wherein the insurer pays a predetermined amount to the at least one premium increase protection component to create a surety relationship between the insurer and the at least one premium increase protection component.

21. The system according to claim 15, wherein the payor is a surety.

22. A process for issuing an insurance policy to a policyholder comprising the steps of: issuing an insurance policy to the policyholder, wherein the policyholder pays an amount of periodic premiums to an insurer to maintain the insurance policy in force, and the policyholder is provided premium increase protection for ensuring that the amount of periodic premiums payable by the policyholder to the insurer do not increase above a predetermined amount; and collecting a predetermined portion of an increase in the amount of periodic premiums payable by the policyholder from at least one premium increase protection component, wherein the policyholder is responsible for paying the insurer for the predetermined portion of an increase in the periodic premium payable above the predetermined amount if the at least one premium increase protection component is unable to meet its responsibilities.

23. The process according to claim 22, wherein the insurance policy is a term life insurance policy.

24. The process according to claim 22, wherein the at least one premium increase protection component is an entity separate and distinct from the insurer in the insurance policy component.

25. The process according to claim 22, wherein the predetermined portion of the increase in the amount of periodic premiums is a portion of the difference between the predetermined amount of periodic premiums and an actual amount of- premiums payable.

26. The process according to claim 22, wherein the at least one premium increase protection component is reimbursed for the predetermined portion of the increase collected from the at least one premium increase protection component by at least one reimbursement component.

27. The process according to claim 22, wherein the at least one premium level protection component enters into an agreement not to collect a payment from the policyholder when the predetermined portion of the increase is collected from at least one premium level protection component and, in exchange for the agreement of the at least one premium increase protection component, an at least one reimbursement component makes a reimbursement payment to the at least one premium increase protection component.

28. The process according to claim 21, wherein the insurer pays a predetermined amount to the at least one premium increase protection component to create a surety relationship between the insurer and the at least one premium increase protection component.